European stock markets have been under a lot of pressure during the last days and they continued to be in a negative territory except for the one in Frankfurt. The mood to be observed for investors who approach the European stock markets is prudence.
Strong volatility of the banking industry was generated by rumors concerning the German bank Deutsche Bank. On Thursday, Bloomberg reported that 10 hedge funds would have closed the derivatives contracts and eliminated excess cash from the accounts deposited at Deutsche. This has triggered the bomb on all world stock markets.
The title of the German bank has reached historical lows and then set off after the news of the AFP agency that spoke of a strong cut of the fine imposed by the DOJ to the Deutsche Bank.
The absence of news about the fine of the DOJ over the weekend, or if the figure does not reveal what advanced by AF, could redeem a sales time during Monday’s session.
Do not forget that on Monday the German Stock Market will be closed for holidays, but the title of the Deutsche Bank is also listed on Wall Street and investors will pay a lot of attention to this.
Leaving aside the Deutsche case, good news arrives from the oil. Consultations of Algiers have not been so unproductive and indeed they have been useful to find an agreement on a light output cut by the major oil producers.
The black gold prices have immediately welcomed the news, recording three consecutive sessions on the rise. However, investors remain skeptical for two reasons: there is the possibility that the agreement cannot be met and non-OPEC producers may take advantage of the situation to increase their production.
However, negative opening of stock markets was anticipated by the closure of the price lists in Thursday’s session. OPEC effect already dampened in the evening and the stock markets closed pretty bad after a day of hikes.
As regards instead the market movers of the week, US macro data have actually shown an improvement this week.
The quarterly GDP was revised upward to 1.4%, still below the 1.8% originally planned, the confidence of consumers and businesses in August increased as well as the index of purchasing managers of Chicago in the month of September. Less positive were the data on durable goods orders and those in home sales pending contracts.
In Europe, however, consumer confidence improved while inflation still struggling to take off. According to the Eurostat report the preliminary Eurozone inflation on an annualized basis increased by 0.4%. In the previous survey, inflation had recorded an increase of 0.2%.
The monthly figure of the unemployment rate for the month of August remained stable instead at 10.1%, unchanged from the previous survey.
On the 1st of October, the Yuan will officially entering the basket of reserve currencies (SDR) of the International Monetary Fund, leading to an increased appetite from investors for the Chinese currency. The entry of the Yuan in the SDR should make the Chinese currency less stable and this is very positive for stock markets and investors.
Next week, traders will watch with interest to the information of the PMI manufacturing and services index in September (both the US and Europe) and American non-farm payrolls on Friday.